How to build development teams in Ukraine
If you need a reliable technology partner with vast expertise and affordable prices consider Ukraine as your primary outsourcing destination.
In 2021, the export of Ukrainian IT services exceeded $5 billion, and the Global Sourcing Association (UK) announced Ukraine as the best country for product development outsourcing. Such recognition was received thanks to a large pool of skilled programmers and their vast software development expertise.
Ukrainian specialists proved to be reliable technology partners who can deliver high-quality products at affordable prices. Given this, it is not surprising that more and more companies consider Ukraine to be the best outsourcing destination. Foreign clients understand that moving software development to this region is way more profitable than hiring an in-house team. If you have the same opinion and want to outsource to Ukraine, continue reading this post. Here, we will explain all the ins and outs of partnering with Ukrainian teams.
World-renowned companies that outsource to Ukraine
Let’s start with a quick overview of companies with R&D centers in Ukraine. These are big names with good reputations, broad customer bases, and multi-million dollar annual turnovers.
Google. This name needs no introduction. It is a multinational corporation investing in Internet search, cloud computing, and advertising technologies. Google opened an R&D center in Ukraine in 2020 when it acquired CloudSimple, a cloud solution provider. The office is located in Kyiv. It became the third of eight Google offices to be established in the CEE region following those in Poland and Hungary.
Snap. Another well-known name in the IT industry. Snap is an American company that produces cameras and develops social networks. It has offices in Odesa and Kyiv. The first was opened after purchasing the Odesa-based startup Looksery, and the second – after acquiring AI Factory – a Ukrainian company specializing in computer vision.
Lyft. Known world-wide, Lyft is a rideshare company that enables users to hire drivers to give them a lift, for moderate fees, via a website or mobile app. In 2021, Lyft decided to augment their team by opening an engineering office in Kyiv, Ukraine. More than 80 Ukrainian software engineers were hired to work on mapping – a service that enables dynamic and relevant interaction between driver and user.
Oracle. An American corporation that develops database management systems, development tools, ERP systems, and supplies server equipment. Oracle has five offshore teams in Ukraine located in Kyiv, Dnipro, Lviv, Kharkiv, and Odesa. Ukrainian specialists work on various tasks, from software development to customer support.
Abbyy. An international IT company and one of the world’s leading optical document recognition technology providers. It has offices all over the world, including in Ukraine. Abbyy’s offshore development team is located in Kyiv and handles different tasks such as software engineering, customer care, and business development.
Tech hubs in Ukraine
Kyiv, Lviv, Kharkiv, Dnipro, and Odesa are the top five hubs in Ukraine’s modern IT market. These are the best cities to outsource development due to an extensive talent pool, developed office infrastructure, and a favorable business environment.
Kyiv, the capital of Ukraine, is the most mature Ukrainian IT center. Almost 70% of all Ukrainian programmers and more than 40% of all Ukrainian IT specialists live there. Two airports, Boryspil and Zhulyany, provide regular flights to different parts of the world, making international cooperation super flexible and agile. For example, it takes only 2 hours to get to Berlin and 10 hours to New York from Kyiv. Yet, with all its advantages, Kyiv has some drawbacks. The main issue is the high cost of living. Therefore, renting an office and hiring employees in Kyiv will cost more than in other outsourcing destinations in Ukraine.
Lviv is a large city on the western side of Ukraine. This tech hub takes second place by the number of IT specialists in the country, with most developers working in outsourcing and outstaffing companies at 46% and 11%, respectively. In addition to the advanced IT sector, the city has well-developed tourism. The VirtualTourist site ranked Lviv as the first European city tourists should visit. So, it’s not surprising that thousands of tourists visit Lviv every year. Lviv International Airport, which serves dozens of flights every day, makes visiting this city easy and enjoyable.
Kharkiv is the second-most populous city of the country, located on the eastern side of Ukraine. It is Ukraine’s extensive scientific, cultural, industrial, and transport center with 60 research institutes and 41 higher education establishments. Companies outsourcing to Ukraine choose this city for its great human resources capacity and strong technological expertise. Kharkiv software engineers work with clients all over the world, however American companies are their most frequent hirers. Kharkiv’s offshore developers produce 65% of all IT exports.
Dnipro is an important industrial, financial, and scientific center of Ukraine. It is called the space capital thanks to two large enterprises, Yuzhmash and Yuzhnoye Design Bureau, specializing in rocket production. According to Techukraine, there are almost 400 IT companies in Dnipro, 62% of which are involved in outsourcing and outstaffing. The IT industries of Dnipro offshore developers range from retail and entertainment to healthcare and fintech. Foreign clients often choose Dnipro for its affordable prices. Developers’ rates in this region are more economical compared to other IT cities of Ukraine. The same is true for renting flats and offices.
Odesa is a large city located on the Black Sea coast. It is the biggest sea trade port, as well as the educational, scientific, and tourist center of Ukraine. Odesa’s IT sector has been actively developing in recent years. Today it has 150 IT companies and 10 thousand IT specialists. An extensive infrastructure of coworking spaces and IT hubs is located around the city center, so it won’t take you more than 15 minutes to get from one to another. Odesa also has a large airport that operates daily domestic and international flights.
Building a development team in Ukraine: a step-by-step guide
Software development outsourcing to Ukraine is the choice of many Western European and American companies that want to get a top-quality product at a lower price. It doesn’t take much effort to create a development team in Ukraine since it has provided IT services for export for a long time and has a transparent cooperation scheme with foreign companies. If you decide to outsource to Ukraine, follow these steps to set up a valuable partnership:
- Find a vendor. Start by choosing an outsourcing team. Do not hurry. Take your time to research the market, read client feedback, and study company case studies. You can check such platforms as Clutch and DOU to see ratings and reviews of leading IT, marketing, and business services companies. In addition, you can book a consultation with several companies and clarify all the issues before making a final decision on cooperation.
- Interview developers. Outsourcing companies have permanent in-house staff and can also recruit software developers on-demand. In any case, the client takes part in the team formation. You will be offered several applicants to interview and assess whether they are a good fit for your project. After you select and approve the candidates, the team will get to work.
- Sign the contract. Legal outsourcing to Ukraine starts with signing a contract that defines the rights and duties of both client and team. Before entering into a partnership, ask for a software development outsourcing contract example. Study it carefully with your lawyer. When all the details are clarified, sign it and begin mutually beneficial cooperation.
- Communicate. The outsourcing team can manage the project independently. However, your participation will help avoid unexpected results and misunderstandings. The best outsourcing practices include regular meetings with the client, where the team reports on the work done and shows the current results. At such meetings, you can discuss relevant issues, make proposals, and adjust development flow.
- Review. The last step is to accept the work and review the results. Further, depending on the project’s nature, you can terminate cooperation or continue the project. If you choose the dedicated team model, you can work on a project as long as you need. In addition to development, you can order customer support so that your customers receive qualified help from the team that knows your product best.
Benefits of outsourcing to Ukraine
Outsourcing is a beneficial cooperation model that allows you to quickly access the technical team and cut the costs for project implementation. Ukraine is one of the most popular outsourcing destinations in Europe. There are almost 12K companies in the country, most of which work with international partners worldwide. Companies from the USA, Germany, Denmark, Switzerland, Italy and many other locations willingly invest in Ukraine and choose its IT resources for the:
- Extensive talent pool – 200K specialists
- Strong technical expertise – 25% of all Ukrainian IT specialists have a senior level, and 63% have a middle level of expertise
- Effortless communication – 85% of IT specialists speak English at least at an intermediate level
- Reasonable prices – an average rate for Ukrainian developers ranges from $25 to $45 while their American and western European counterparts charge $55 – $56 an hour
- Favorable business climate – Ukrainian laws encourage the investment of foreign capital and create a welcoming environment for international partners
- Convenient time-zone – Ukraine has 2 hours difference from European countries and is 7 hours ahead of the USA
- Cultural tolerance – Ukraine is a part of Europe, so the mentality and attitude to work are in-sync with their international partners
The future of Ukrainian IT
According to the IT Ukraine Association, the Ukrainian IT market will grow by 22-30% annually over the next few years. Also, the number of specialists is expected to double by 2024, compared to the 2020 figure, given that the number of IT businesses entering the market with their own products is increasing. Considering that many foreign clients already prefer to open dedicated teams in Ukraine, rather than outsource individual functions, this trend looks likely to continue.
Of course, Ukraine is not the only country to which foreign clients outsource development. The entire East European region has solid technological potential. Nevertheless, when deciding, for example, between outsourcing to Ukraine or Poland or Romania, the choice often falls to the former because of its less overheated market. Although Ukraine has recently seen a rush for IT specialists, its human resources still cover the needs of current employers. And with 150 universities and colleges in this country, we can expect an even greater supply of multi-professional IT staff in the coming years.
The main technological hubs are mentioned above, however, the Ukrainian IT ecosystem is becoming more extensive, with other Ukrainian regions getting involved in the national IT flow, creating the necessary conditions for a fast technological rise. Local businesses are often merging into IT clusters, where they share experiences and support each other. A recent report states that more than 20 Ukrainian cities have set up local IT communities. Additionally, the IT Ukraine Association operates nationwide and includes 60+ top players in the domestic IT market.
Ukraine is a fast-growing technological region. It has a large number of qualified specialists and a welcoming business environment. Outsourcing to Ukraine is a smart choice for those who want to quickly upscale their business based on third-party technological expertise. Here, foreign clients can choose from a variety of software vendors located in five major tech hubs. In addition, there is a transparent scheme of cooperation with Ukrainian companies, which allows clients to choose team members and participate in the development process. If you are thinking of outsourcing your company’s IT development, choose Ukraine for a superior, economical, and reliable technology partner to help drive your business ahead.